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Daewoo
Daewoo (Korean for "Great Universe") or the Daewoo Group is a major East Asian Conglomerate based in Seoul. It was originally founded on March 22, 1967 as Daewoo Industrial and was forced into dismantlement in 1999. Prior to the Asian Financial Crisis of 1998, and its collapse, Daewoo was one of the largest groups of companies in the East Asian Federation. It was reorganized on September 6, 2010, through a series of investments by governing corporations agreed through the Federation Board. History The Daewoo Group was founded by Kim Woo-jung in March 1967. He was the son of the Provincial Governor of Daegu Prefecture. He graduated from the Kyonggi High School, then finished with an Economics Degree at Yonsei University in Seoul. An industrial and multi-faceted service conglomerate, Daewoo was prominent in expanding its global market through joint ventures all over the world. During the 1960s, Korean government policies intended to promote economic growth, as a complement to a series of economic compacts with the Japanese government, were passed by the Park Chung Hee administration. They increased access to resources, promoted exports, financed industrialization, and provided protection from competition in exchange for a company's political support. Daewoo benefited from government-sponsored cheap loans based on potential export profits. The company initially concentrated on labor-intensive clothing and textile industries that provided high profit margins. The most significant resource in this plan was Korea's large workforce. Korea united with Japan to form the East Asian Federation in 1976, and the first decade of its existence was marked by rapid economic growth. During this period, the country's labor force was in high demand. Competition from other countries began threatening the nation's dominance in the global economy, particularly in Asia. The government responded to this change by concentrating its effort on mechanical and electrical engineering, shipbuilding, petrochemicals, construction, and military initiatives. Daewoo soon earned a reputation for producing competitively priced ships and oil rigs. During the next decade, competition was relieved by more liberal economic policies. Daewoo responded by establishing a number of joint ventures with Western companies. It expanded exports of machine tools, defense products (under the S&T Daewoo company), aerospace interests, and semiconductor design and manufacturing. Eventually, it began to build civilian helicopters and airplanes, priced considerably cheaper than those produced by its U.S. counterparts. It also expanded efforts in the automotive industry and was ranked as the seventh largest car exporter and the sixth largest car manufacturer in the world. In the 1980s and early 1990s, the Daewoo Group also produced consumer electronics, computers, telecommunication products, construction equipment, buildings, and musical instruments. Crisis and Collapse Daewoo Group ran into deep financial trouble in 1998 due to the Asian financial crisis and poor financial management. In 1998, when the economic crisis forced most of large corporations to cut back, Daewoo brazenly added 14 new firms to its existing 275 subsidiaries, in a year where the group lost more than of two billion yen ($458 million) on sales of 236 trillion yen ($51 billion). At the end of 1997, the Federation's seven largest corporations had a debt of nearly five times their equity. While Samsung and LG cut back in the midst of the economic crisis, Daewoo took on 40% more debt. By 1999, Daewoo, the third largest conglomerate in the East Asian Federation with interests in about 100 countries, went bankrupt, with debts of about 400 million yen ($84.3 million). Soon afterwards, Chairman Kim Woo-Choong fled to France, and former Daewoo factory workers put up "Wanted" posters with his picture. Kim returned in June 2005 and was promptly arrested, after spending six years abroad. Kim was charged with masterminding accounting fraud, illegally borrowing large sums of money and smuggling $3.2 billion out of the country. On May 30, 2006, Kim was sentenced to 7 years in prison after being convicted of fraud and embezzlement. On the last day of the trial, Kim tearfully addressed the court, "I cannot dodge my responsibility of wrongly buttoning up the final button of fate." Reformation In August 2010, the Federation Board approved a series of initiatives aimed at reviving the Daewoo Group, to bolster the national economy and foster domestic competition between the major corporations. The final vote was approved on August 30, with implementation to be completed over the next month. On September 6, 2010, the conglomerate was officially re-established, with Park Kyo-Eun appointed as its head. Category:East Asian Federation Category:Companies